Kerry Underwood has been writing an interesting set of posts about the questionable practices used by insurers in dealing with claims. Today’s post caught my eye. It reminded me of Stephen Mayson’s concerns about the regulatory gap, where certain types of providers of non-reserved legal services have the benefit of lighter regulation to the potential detriment of consumers. What Kerry’s post reminds us is that those not actually providing legal services (in the conventional sense) may also take advantage of a regulatory gap. Kerry paints a picture of insurers trying to bully clients into settlement in ways which a solicitor would be prohibited from doing. The insurer is not providing legal services to anyone other than itself, and yet the potential claimant is the one who (might be) prejudiced, confused or frightened by (arguably) dubious tactics.
The regulatory framework permits this uneven regulation. It may then inculcate in the professions a sense of grievance, damaging their commitment to professionalism. The chances of a thoroughgoing review of the definition of reserved legal services seems remote – no matter how rational the case for this appears to be, so the chances of a broader review which encompasses to totality of behaviours in the system must be remoter still. Insurers play the politics better and yet may be less ethical in their practices than the claimant lawyers they so publicly criticise. Of course, Kerry’s views may be only part of the picture. We should watch with interest to see how insurers respond to these complaints, if indeed they see fit to respond at all. It would be interesting also to know of this is something that the SRA, for example, take up with the insurance industries’ regulators and interest groups. It would also be interesting to know if any of the letters emanating from insurance companies are produced, approved or supervised by in-house legal staff who are admitted. There professional conduct sanctions could, in certain circumstances, bite.